Suzanne Evans
Well-Known Member
AIMs: Describe the role of risk governance in a corporation. Identify Enterprise Risk Management (ERM) approaches and explain how they address risk management in an organization. Describe how the value of a risky asset or project can be estimated through the development of a risk-adjusted discount rate, how such a risk-adjusted discount rate can be created, and strengths and weaknesses of this approach.
Questions
301.1. In regard to risk governance, the World Bank's International Finance Corporation (IFC) asserts EACH of the following as true EXCEPT:
a. Risk governance, which includes oversight of the company's risk policies and procedures, is the responsibility of the board
b. The board’s role is to establish the firm’s general risk philosophy and risk policies, including risk tolerances in each material business area
c. The firm's executive management is responsible for implementation of a robust risk management program
d. Just as all NYSE-listed pubic companies are required to establish a separate board risk committee, all private and public companies "irregardless of size" should create a board-level risk committee.
301.2. Which of the following is most nearly an ESSENTIAL feature of an Enterprise Risk Management (ERM) framework?
a. Compliance with the acknowledge ERM gold standard in frameworks: the Casualty Actuarial Society (CAS) ERM framework
b. Compliance with regulatory requirements such as Sarbanes–Oxley Act
c. Linkage to the value-creating objectives of stakeholders, in particular shareholders
d. Comprehensive itemization of risks and their delegation to individual silos within the organization
301.3. Which of the following definitions is INCORRECT?
a. Risk profile: inventory (list) of a firm's exposures, including desirable risks to be retained
b. Risk aversion: a state of absolute preference to hold an entirely risk-free position
c. Risk appetite: the amount of risk an organization is willing to seek or accept in pursuit of its long-term objectives
d. Risk tolerance: the boundaries of risk taking outside of which the organization is not prepared to venture in the pursuit of long-term objectives
Answers:
Questions
301.1. In regard to risk governance, the World Bank's International Finance Corporation (IFC) asserts EACH of the following as true EXCEPT:
a. Risk governance, which includes oversight of the company's risk policies and procedures, is the responsibility of the board
b. The board’s role is to establish the firm’s general risk philosophy and risk policies, including risk tolerances in each material business area
c. The firm's executive management is responsible for implementation of a robust risk management program
d. Just as all NYSE-listed pubic companies are required to establish a separate board risk committee, all private and public companies "irregardless of size" should create a board-level risk committee.
301.2. Which of the following is most nearly an ESSENTIAL feature of an Enterprise Risk Management (ERM) framework?
a. Compliance with the acknowledge ERM gold standard in frameworks: the Casualty Actuarial Society (CAS) ERM framework
b. Compliance with regulatory requirements such as Sarbanes–Oxley Act
c. Linkage to the value-creating objectives of stakeholders, in particular shareholders
d. Comprehensive itemization of risks and their delegation to individual silos within the organization
301.3. Which of the following definitions is INCORRECT?
a. Risk profile: inventory (list) of a firm's exposures, including desirable risks to be retained
b. Risk aversion: a state of absolute preference to hold an entirely risk-free position
c. Risk appetite: the amount of risk an organization is willing to seek or accept in pursuit of its long-term objectives
d. Risk tolerance: the boundaries of risk taking outside of which the organization is not prepared to venture in the pursuit of long-term objectives
Answers:
